(a) Give any five features which are common to both cooperative societies and private limited companies
(b) Explain any five differences between cooperative societies and private limited companies.
Explanation
(a) Features that are common to cooperative society and private limited companies are:
(i) They are registered.
(ii) They are a legal entity.
(iii) Members buy shares.
(iv) The liability of members is limited.
(v) They hold annual general meetings.
(b) Difference between private limited companies and co-operative societies are:
Co-operative Societies Private Limited Companies.
(i) Profits are divided according to the patronage of members. Profits are declared as dividends according to shares held by members.
(ii) Any member of the public may become a member. Membership is restricted to close associates or family circles.
(iii) Committee members manage the affairs of each society. Appointed managers carry out the day to day management of the company.
(iv) They are not necessarily formed to make a profit but for members’ welfare. The main aim is to make a profit.
(v) Democratic voting at the meeting -one man, one vote. If there is a call for a poll, votes are based on the number of shares that a member holds.